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Polish Coal Sector: Beginning of a Phase- out Era?

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Polish Coal Sector: Beginning of a Phase- out Era? MASARYKOVA UNIVERZITA FACULTY OF SOCIAL STUDIES Polish Coal Sector: Beginning of a Phase- out Era? Master's Thesis ANEŽKA KONVALINOVÁ Supervisor: doc. Mgr. Filip Cernoch, PhD. Department of International Relations and European Studies International Relations and Energy Security Studies Brno 2020/2021 FSS POLISH COAL SECTOR: BEGINNING OF A PHASE-OUT ERA? Bibliographic Record Author: Anežka Konvalinová Faculty of Social Studies, Masaryk University Department of International Relations and Euro­ pean Studies Title of Thesis: Polish Coal Sector: Beginning of a Phase-out Era? Degree Programme: International Relations and Energy Security Studies Supervisor: doc. Mgr. Filip Černoch, PhD. Academic Year: 2020/2021 Number of Pages: 63 Keywords: Poland, Coal, Sociotechnical imaginaries, Energy Security, EU. Energy and climate policy 1 POLISH COAL SECTOR: BEGINNING OF A PHASE-OUT ERA? Abstract This master's thesis focuses on the latest trends in the Polish energy sec• tor, with particular attention paid to the coal industry. Inspired by (Kuchler & Bridge, 2018), this thesis is a take on the socio-technical im- aginaries concerning coal mining and combustion infrastructure in Po• land. This thesis will recognize the role of historically defined cultural influences in the way the country's energy sector is built and has worked towards contributing to the existing knowledge. Firstly, it will explain how the deteriorating materialities of the mining sector have set current visions of the country's coal future against each other. And secondly, it will also call into question the very notion of a static Polish society that unquestionably and unanimously supports the energy direction that emerged sometime in the communist period. 2 POLISH COAL SECTOR: BEGINNING OF A PHASE-OUT ERA? Statutory Declaration I hereby declare that I have written the submitted [select type of docu• ment] concerning the topic of Polish Coal Sector: Beginning of a Phase-out Era? independently. All the sources used for the purpose of finishing this thesis have been adequately referenced and are listed in the Bibliography. In Brno 14th January 2021 Anežka Konvalinová 1 POLISH COAL SECTOR: BEGINNING OF A PHASE-OUT ERA? Acknowledgements Throughout the writing of this thesis and my studies, I have received a great deal of support and assistance. I would firstly like to thank my su­ pervisor, doc. Mgr. Filip Černoch, PhD., whose expertise was invaluable in formulating the research and thesis as a whole. Your insightful feed­ back pushed me to sharpen my thinking and elevated my work. I want to thank Mgr. et Mgr. Veronika Zapletalová, PhD., her patience and support, for all the opportunities, and for her immense trust in me; it changed my life completely (Dzi^kuj^ bardzo Kochanie) I would also like to thank my beloved classmates, namely: Karolína, Dária, Sayaly, Sebastián, Michal and Dominik, for their support, love, and all the time spent drinking beer and talking about energy. You have made these last two years unforget­ table. I would also like to thank my family, especially my two sisters Eliška and Libuška, for their support and love. You are always there for me. Finally, I could not have completed this thesis without my friends' support, who were always there to help me and make me happy. More­ over, I would like to give a special shout-out to coffee, beer, and wine - you got me through this as well. TABLE OF CONTENTS 5 Table of Contents List of Images 7 List of Terms and Acronyms 8 1 Introduction 11 2 Socio-technical imaginaries 14 3 Methodolody and Data Collection 16 4 Historical Imaginaries 18 4.1 Energy security first 18 4.2 Indigenous is secure 20 5 When materialities clash with ideas 22 5.1 Post-communist challenges 22 5.2 Increasing pressure on Polish coal 24 5.3 Government's response 27 5.4 Coal imported from Russia 28 6 The emergence of new imaginaries 32 6.1 The new order of Polish Energy 32 7 Conclusion and policy implications 37 Bibliography 39 5 LIST OF IMAGES 7 List of Images Graph 1: Total production of hard coal and lignite 1990-2018 23 Graph 2: Total amount of hard coal imports to Poland 29 Graph 3: Balance of coal imports 30 7 8 LIST OF TERMS AND ACRONYMS List of Terms and Acronyms EU - European Union UK - The United Kingdom of Great Britain and North ern Ireland IEA - International Energy Agency OECD - Organisation for Economic Co-operation and De velopment PiS - Prawo i Sprawiedliwosc PGG - Polska Grupa Görnicza SA EGD - European Green Deal LNG - Liquefied Natural Gas GHG - Greenhouse gas C02 - Carbon dioxide NOx - Nitrogen oxides ETS - Emissions trading system IED - Industrial Emissions Directive BAT - Best Available Techniques PGE - Polska Grupa Energetyczna PGNiG - Polskie Görnictwo Naftowe i Gazownictwo SA. KGHM - Kombinat Görniczo-Hutniczy Miedzi PLN - Polish zloty USD - United States dollar EUR - Euro SRK - Spölka Restrukturyzacji Kopalh SA BGK - Bank Gospodarstwa Krajowego PZU - Powszechny Zaklad Ubezpieczeh Spölka Akcyjna 8 LIST OF TERMS AND ACRONYMS 9 PKO BP - Powszechna Kasa Oszcz^dnosci Bank Polski Spolka Akcyjna PIR - Polskie Inwestycje Rozwojowe FRP - Funduszu Rozwoju Przedsi^biorczosci FIPP - Fundusz Inwestycji Polskich Przedsi^biorstw TF Silesia - Towarzystwo Finansowe Silesia WTO - World Trade Organization 9 INTRODUCTION 1 Introduction Driven by climate change concerns, the EU is committed to decarboniz• ing its energy mix, with coal being the primary victim of this trend (Eu• ropean Commission, 2010, 2011, 2018, OECD/IEA, 2018). Several Euro• pean countries, such as Denmark, Spain, Austria, and the UK, have al• ready reduced their coal consumption significantly; others have intro• duced plans to do so, including Germany and the Czech Republic—the first and third largest EU consumers of solid fossil fuels. (Eurostat, 2019; IE A, 2017; Sivek et al., 2017). Poland, the second-largest consumer in the European Union, seems to resist this trend. Since 2017, Kozienice, Jaworzno, Opole, Turow, and K^dzierzyn-Kozle power plants have been commissioned to replace the aging infrastructure and keep the coal demand unhindered (Caldecott et al., 2017). State-owned utilities Energa and Enea only recently stopped searching for monetary resources to finish the Ostroleka C plant. Another state-owned company PGE has expanded the Turow mine on the Polish- Czech border to keep it operational until 2044, and the government has publicly supported opening the Zloczew mine to provide new supplies of coal for the EU's largest C02 emitter, the Belchatow power plant (Car• penter, 2020). What motivates Poland to strongly defend the importance of coal, keep money flowing into a new infrastructure, and cement the domestic energy system dependency on this fuel? With painful financial and soci• etal costs of transformation, a significant carbon lock-in is part of the an• swer. However, what is especially typical for Poland is that the situation is exaggerated by the extraordinary level of securitization of coal. The commodity is portrayed as an absolute staple of the domestic energy sec• tor, economy, and country's independence and sovereignly (Kiuila, 2018; Piria etal., 2014; Rentier etal., 2019). No financial, environmental, health, or diplomatic cost seems to be high enough to justify questioning the continuous mining and burning of coal. This is how Poland tradition• ally perceives itself, and this is how the rest of the EU understands Po• land. As a coal obsessed and climate villain country, any chance for de- carbonization and sensible energy policy is suppressed by security con• cerns, geo-politics, and longing for energy autarky. However, analysis of the latest development revealed that this pic• ture might be out-dated, both on a material and ideational level. Poland's 11 INTRODUCTION recent elections (parliamentary and presidential) highlighted the chang• ing narratives of coal's position in the state's energy mix. The dire situa• tion in the Polish coal sector and the increasing external pressure was also reflected in the electoral programs of parties that were traditional supporters of coal (e.g., the ruling PiS party and its candidate for the pres• idential elections, Andrzej Duda). The changing narratives were also re• flected in the Ministry of the Environment's latest government concept, which significantly reduces coal share in the energy mix. A few months ago, the date of Poland's exit from coal was agreed between the most prominent Polish mining firm PGG and the representatives of mining un• ions, all with the involvement of the government (Ministerstwo Klimatu i Srodowiska, 2020.; Jozefiak, 2020.; Jakobik, 2020). A new trend seems to be emerging, with only scanty reflection in academic literature (for the exception see Szulecki, 2020). This thesis focuses on the Polish energy sector's latest develop• ments, with special attention given to the coal industry. Inspired by (Kuchler & Bridge, 2018) work on socio-technical imaginaries surround• ing the infrastructure of coal mining and combustion in Poland, we must acknowledge the importance of historically determined cultural factors in the way the energy sector of the country is constructed. However, we contribute with two essential findings to the existing knowledge. Firstly, we illustrate how the mining sector's worsening materialities put exist• ing visions of the country's coal future against each other. Moreover, we challenge the very idea of static Polish society unquestioningly and uni• formly supporting the energy pathway originating sometime in the com• munist era. Research of this kind has a severe practical impact. Poland is a vital and assertive EU country, purposefully defending its position in any en• ergy or climate-related debate and is an essential part of any orches• trated EU decarbonisation efforts. Ever since the Polish government has used the argument of energy security to water down multiple EU decar• bonisation policies, a practice that culminated in December 2019, when Poland was the only EU member not to sign the European Green Deal (EGD) with its 2050 decarbonisation goals.
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